A longtime filmmaker-cinematographer and his wife were convicted Friday of defrauding the federal government of several hundred thousand dollars while running a program billed as preparing wounded Marines for jobs in the film industry.
A federal court jury in San Diego convicted Kevin Lombard, 64, and Judith Paixao, 61, of conspiracy to commit fraud, theft from an organization receiving federal funds, and filing false claims. Paixao was also convicted of mail fraud involving the Bob Woodruff Foundation.
Prosecutors said the pair fraudulently billed the Department of Veterans Affairs for personal expenses, including cellphone bills for relatives, a Caribbean vacation, meals in fancy restaurants, and a New Year's Day sailing outing around San Diego Bay.
The VA was charged up to $88,000 per veteran for the 10-week course, according to evidence presented at trial.
The pair "capitalized on the misfortune of wounded Marines in their time of vulnerability and took advantage of the VA's commitment to serving wounded veterans," said U.S. Atty. Laura Duffy.
Sentencing is set for Oct. 19.
Under the name Wounded Marine Careers Foundation Inc., the program, listed as a nonprofit charitable organization, began in 2007 but lasted only three years.
At first, the program was supported by prominent trustees, including two former Marine commandants.
But it folded amid accusations and legal claims by employees and students that the school had charged too much and exaggerated the possibilities of employment and membership in a Hollywood labor union.
Lombard, in a 2009 interview with the Marine Corps Times, said he had underestimated the cost of beginning a program to teach filmmaking.
He asserted that he invested $2 million of his own money, including transforming a warehouse in San Diego into a film studio and teaching laboratory.
"The equipment is expensive and the personnel who teach you to learn on the equipment [are] expensive," Lombard told the newspaper. "The technology is changing so quickly, you've got to be able to keep up with them."
Lombard told reporters that he started the program after initially considering a documentary about Marines injured in Iraq and Afghanistan but deciding instead to help them transition to civilian life. Lombard said his father was a Marine.
In news stories during the short-lived program, Paixao was described as a real estate developer who assisted with her husband's films and documentaries. The couple moved to San Diego from Connecticut to run the program.
According to evidence submitted during the month-long trial, the pair commingled private funds with foundation money and took more than $400,000 from the foundation account.
Evidence also indicated that Paixao defrauded the Bob Woodruff Foundation of almost $100,000 by hiding the fact that one of the intended recipients -- a Marine injured in Fallujah -- had left the program, prosecutors said.
Before it closed, the training program had received $1.2 million from the VA, prosecutors said.